REPORT: Peter Chernin Bids $500 Million For Hulu
Peter Chernin, the former president of News Corp, has bid around $500 million for online video streaming service Hulu.com according to sources with Reuters. Peter Chernin even helped launch Hulu while he was at News Corp in 2007.
Hulu is currently controlled by News Corp and Walt Disney Co. This past March, News Corp and Walt Disney reached out to buyers for Hulu. Currently It is unclear if News Corp and Disney are considering the offer. NBCUniversal also used to be an owner in the company, but they gave up control as a condition for being bought out by Comcast. Chernin is a former Hulu board member and he founded a media holding company called The Chernin Group in 2009. The Chernin Group is mostly known for film and TV production, but they also have investments in technology companies.
The Chernin Group has a large stake in the streaming radio service, Pandora. The Chernin Group received a large boost when Providence Equity Partners put $200 million into the company this past November. Providence Equity used to be a stakeholder in Hulu with 10% ownership. When Providence Equity Partners sold 10% of Hulu this past October for $200 million, Hulu was given a valuation of $2 billion.
Hulu currently has over 3 million premium subscribers and they generated around $700 million in revenues last year. This means that the $500 million offer can be considered a low-ball. If News Corp and Walt Disney reject Chernin, it would not be the first time that a large offer for Hulu has been turned down. Hulu received bids in 2011, but the company refused.
Hulu also considered going public in 2010, but they feel less pressure as a private company. Being a private company makes it easier for Hulu to focus on growth and scale without pressure from shareholders.